Bonds
A bond isn't insurance for you. It's a promise to someone else that you'll do what you said. If you don't, the bond company pays them, and then you pay the bond company back.
The bonds businesses ask us for most
- License and permit bonds
A state, county or city wants one before it issues certain licenses or permits. The amount is set by whoever asks for it.
For example A county asks for a bond before it lets you dig in the public right-of-way to run a line to a job.
- Contractor license bonds
Some contractor licenses require a bond, and some let a bond stand in for the financial statements you'd otherwise file.
For example In some Tennessee counties, a home-improvement contractor taking $3,000 to $24,999 jobs needs a $10,000 bond.
- Notary bonds
Required before you get your notary commission. It protects the public if a notarization is done wrong.
For example A new Tennessee notary posts a $10,000 bond. In Kentucky it's $1,000.
- Motor vehicle dealer bonds
Car lots post one with the state to get and keep a dealer license.
For example A Tennessee dealer with two lots needs a $50,000 bond for each location.
- Performance and payment bonds
Big public jobs require both. The performance bond promises the work gets finished. The payment bond promises your subs and suppliers get paid.
For example A Kentucky county hires you for a $150,000 building project. Expect performance and payment bonds, each for the full contract amount.
What the states require
Tennessee
- Notaries must post a $10,000 surety bond before receiving a commission. Source: comptroller.extglb.tn.gov
- Home-improvement contractors working residential jobs of $3,000 to $24,999 in the counties that require a license must provide a $10,000 bond or an approved alternative. Source: tn.gov
- Motor vehicle dealers must keep a $50,000 surety bond for each licensed location. Source: tn.gov
Kentucky
- Notaries must post a $1,000 bond after appointment and before receiving the commission. Source: web.sos.ky.gov
- State and local public construction contracts over $100,000 generally require performance and payment bonds, each for 100% of the contract. Source: apps.legislature.ky.gov
Virginia
- Class A and Class B contractor applicants may submit a $50,000 surety bond instead of showing the required net worth. Source: dpor.virginia.gov
- Public construction over $500,000 (or state-funded transportation work over $350,000) generally requires full-value performance and payment bonds. Source: law.lis.virginia.gov
Rules change. We checked these against the official sources in October 2026; call us before you rely on one.